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IPFS News Link • Politics: Democratic Campaigns

This Proposed Law Would Flood Small-Business Employers with Ruinous Lawsuits

• by Hans Bader

oe Biden released his "racial equity plan" on Tuesday. Some of it deals with racial issues, like a major expansion of affirmative action and lots of race-related government spending.

But it also contains radical changes to America's employment laws that have little to do with race. Under his plan, even the tiniest employers with only one or two employees will face unlimited liability in lawsuits, for things like discrimination, or harassment committed by an employee. It would also make confusing changes to the legal definition of sexual harassment that could lead to small businesses being liable for trivial acts by an employee. These small employers would also be liable for attorneys fees that could dwarf what they end up paying workers who sue them.

Right now, small businesses aren't covered by most federal discrimination laws like Title VII, unless they have at least 15 employees. This doesn't mean they can get away with being racist. If they intentionally discriminate based on race, they can be sued under a race discrimination law that covers even the smallest employers, 42 U.S.C. 1981. And if they fire someone for a non-race-based reason—such as because of their sex, age, or religion—they can typically be sued under a state civil-rights law, or for wrongful termination in violation of public policy. But the amount of damages and attorneys fees the business has to pay is often quite limited. And businesses with fewer than 15 employees aren't covered by federal laws against unintentional discrimination, or non-racial discrimination.